Help to Buy ISA and Emigrating

Aquapanther

Hi guys,

I have recently got married in the US so am going to be emigrating here.
I know (or have just read) that I cannot continue paying into my Help to Buy ISA once I become a "non-resident".

At what point is would I be considered to be a non-resident? When I get my green card? When I am considered a non-resident for tax purposes (I'm past that point right now)?

However my wife and I may plan to move back to the UK in a few years when we start to have kids.
Is there any point in me keeping the money in the help to Buy ISA, ie.......
...if I purchased a house in the US, would that disqualify me from the government bonus?
...if not, would the government still pay me the bonus if I have been out the UK for a few years (not paying any tax, but still paying voluntary NI contributions)?


Thanks.

bowlhead99

Aquapanther wrote: »

.
I know (or have just read) that I cannot continue paying into my Help to Buy ISA once I become a "non-resident".

At what point is would I be considered to be a non-resident? When I get my green card? When I am considered a non-resident for tax purposes (I'm past that point right now)?

Non resident refers to being non resident for tax purposes. If you're not resident for UK tax purposes you can't contribute to any ISA products. As far as HMRC are concerned you can keep any UK savings products you had when you left, but can't add more to ISAs.

Note that the US IRS will not consider any interest you earn in your UK ISA accounts as tax exempt - they are only exempt from UK tax, not from US tax.

However my wife and I may plan to move back to the UK in a few years when we start to have kids.
Is there any point in me keeping the money in the help to Buy ISA, ie.......
...if I purchased a house in the US, would that disqualify me from the government bonus?

When you try to claim the bonus you will have to confirm that you have never owned a part of any residential property anywhere in the world. If you can't do that truthfully, you won't qualify for the bonus.

...if not, would the government still pay me the bonus if I have been out the UK for a few years (not paying any tax, but still paying voluntary NI contributions)?

You don't need to have been in the UK for the entire period you have held the account - you only need to be UK resident in the tax years you're making contributions to it.

bostonerimus

To add to bowlhead99's points, if you keep the ISA you should avoid holding any non-US domiciled investment funds inside it as these will be taxed by the IRS under US Passive Foreign Investment Company (PFIC) rules which are complicated and draconian.

Well done on committing to keep paying voluntary NI, that can be a sensible for UK expats. Also do a general inventory of your finances and make sure they are in good shape wrt US taxation.

Aquapanther

Thanks guys.
All interest from UK accounts (including the cash ISA) have been reported to the IRS.

It is likely that I will purchase a house in the US before any possibility of coming back to the UK so best course seems to be just shut the ISA down and transfer the money to the UK!

I wish to keep 1 bank account and one credit card in the UK...do I need to tell those institutions that I am in the US or can I just use my parents address?

eskbanker

Aquapanther wrote: »

I wish to keep 1 bank account and one credit card in the UK...do I need to tell those institutions that I am in the US or can I just use my parents address?

I suspect you know the answer to this!

Check the Ts & Cs of the products concerned and see what they say about your responsibility to notify them of changes of address - I'd be surprised if any would be happy not to be informed of where you actually live....

bostonerimus

You will be US tax resident from the moment you enter the US on your Green Card. You can find out your UK tax residency status by using one of the online UK tax residency flow charts.